New York Community Bancorp Inc.’s stock moved up premarket Thursday after its largest-ever one-day loss in the previous session, after the bank said it would beat analyst estimates for 2024 net interest income.
New York Community Bancorp’s
NYCB,
stock was up by 3% on volume of about half a million shares.
After the close of trading on Wednesday, New York Community Bancorp said it expects 2024 net interest income of $2.8 billion to $2.9 billion, which is ahead of the FactSet consensus estimate of $2.76 billion.
Net interest income reflects a bank’s profit from loans minus money it pays out in the form of interest for savings accounts.
New York Community Bancorp also expects net interest margin of 2.4% to 2.5%, below the analyst estimate of 2.55%. But its outlook includes actions to increase its balance sheet liquidity and regulatory compliance.
It’s also projecting loans to drop by 3% to 5% in 2024, while its deposits are expected to increase by 3% to 5%.
The bank expects cash and securities to increase by $7.5 billion on a combined basis in 2024.
Crunching the new numbers, Wedbush analyst David J. Chiaverini reiterated his underperform rating on New York Community Bancorp but said its net interest income outlook is above his prior forecast of $2.7 billion.
Wedbush raised its 2024 earnings-per-share estimate for New York Community Bancorp to 80 cents a share from 65 cents a share, “owing mainly to higher average earning asset and net interest income assumptions following the company’s guidance update.”
Wedbush’s underperform rating on New York Community Bancorp is based on the bank’s above-average commercial-real-estate exposure and the risk posed as these loans mature or reset/reprice at higher rates, he said.
Moody’s has placed all long-term and short-term ratings and assessments of New York Community Bancorp Inc. and its Flagstar Bank NA unit on review for downgrade from its current rating of stable, the ratings agency said late Wednesday.
Moody’s cited the bank’s “unanticipated loss content in its New York office and multifamily properties, weak earnings, material decline in its capitalization and high and growing reliance on wholesale funding.”
While the bank’s acquisition of selected assets of Signature Bank improved its capitalization and funding profile, the same metrics deteriorated to pre-acquisition levels as of Dec. 31, partly because the bank now must meet Category IV regulatory requirements of being a bigger bank with $100 billion to $250 billion of assets, Moody’s said.
“Moody’s expects capitalization and funding to remain under pressure,” Moody’s said.
Jefferies analyst Casey Haire downgraded New York Community Bancorp to hold from buy and cut the bank’s price target to $6 a share from $13 on the bank’s unexpectedly faster Category IV bank compliance.
He cut his 2024 profit estimates for the bank by about 30%.
“NYCB’s actions taken thus far are a solid step forward, but impair profitability significantly given a need to run with higher capital/liquidity/reserves while trailing Cat IV peers modestly,” Haire said. “We expect the path to improved profitability will take years while credit risk remains an overhang.”
Raymond James analyst Steve Moss downgraded New York Community Bancorp to market perform from strong buy because its outlook changed unexpectedly.
“The announced repositioning significantly reduces the benefit of acquiring Signature Bank from the FDIC and highlights that regulatory rules for crossing $100 billion in assets is considerably more punitive especially given the dividend cut and level of reserve build that occurred this quarter,” Moss said.
